Actively Managed ETF Filings

USAA, which provides financial services to individuals and families that serve or have served in the U.S. military, has filed with the Securities and Exchange Commission to create actively managed ETFs.

According to an SEC filing, the USAA Asset Management company is seeking exemptive relief under the 1940 Investment Act, or “ETF relief,” to permit the Trust to operate actively managed exchange-traded shares.

USAA managed more than $54.9 billion in mutual fund assets and over $14.5 billion in managed accounts at the end of 2012.

Additionally, the filing includes a list of proposed Initial Funds that can hold equity securities or fixed-income securities traded in the U.S. or non-U.S. markets, including:

  • Cornerstone Moderately Aggressive Fund will invests in equity securities, bonds, money market instruments, and other instruments.
  • Dividend Equity Fund will hold up to 80% U.S. stocks that normally pay dividends and 20% of foreign dividend paying stocks.
  • Flexible Income Fund will include income-producing securities that carry the most attractive opportunity for total return, such as high-yield bonds, bank loans, non-dollar-denominated bonds, preferred stocks, and common stocks.
  • Global Managed Volatility Fund will provide exposure to multiple asset classes and include an option-based risk-management strategy to manage volatility over time.
  • High Income Fund will hold U.S. dollar-denominated high-yield securities, convertibles, leveraged loans or preferred stocks, with an emphasis on non-investment grade securities.
  • Intermediate Term Bond Fund will include a range of deb t securities that have a dollar-weighted average portfolio maturity between three to 10 years.
  • Precious Metals and Natural Resources Fund will have equity exposure to domestic and foreign companies that engage in the exploration, exploitation, or processing of gold and other precious metals and natural resources, such as platinum, silver, copper, oil, natural gas, and other metals, minerals and energy related companies.
  • Real Return Fund will invest in securities that will have a total return that exceeds the rate of inflation over an economic cycle, such as inflation-linked securities, fixed-income securities, including bank loans, non-U.S. dollar instruments, including foreign currencies; equity securities  and commodity-linked instruments.
  • Short-Term Bond Fund will include a broad range of investment-grade debt securities that have a dollar-weighted average portfolio maturity of three years or less.
  • Tax Exempt Intermediate-Term Fund will hold investment-grade securities the interest from which is exempt from federal income tax, with an average maturity between three to 10 years.
  • Tax Exempt Long-Term Fund will use investment-grade securities the interest from which is exempt from federal income tax, with an average maturity of ten or more years.
  • Tax Exempt Short-Term Fund will have investment-grade securities the interest from which is exempt from federal income tax, with an average maturity of three or less years.
  • Total Return Strategy Fund has a dynamic allocation strategy that allows managers to invest at any given time a portion or substantially all of the Fund’s assets allocated to it in stocks or bonds, and/or cash equivalents.
  • Ultra Short Term Bond Fund will include investment-grade debt securities that have a dollar-weighted average portfolio maturity of 18 months or less.

For more information on active ETFs, visit our actively managed ETFs category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.